Rising fuel prices pushed the Producer Price Index - Final Demand (PPI-FD) measure of wholesale inflation to 0.6% for January, beating the 0.3% consensus estimate. The core PPI, which excludes the more volatile food, energy and retail sectors, met expectations with a 0.2% increase. Both the PPI and core PPI were up 1.6% Y/Y.

The consensus estimate for the Consumer Price Index (CPI) was 0.3%, but a sharp 7.8% increase in gasoline index accounted for nearly half of January’s 0.6% CPI rise, with increases in shelter, apparel and new vehicles also making major contributions. The 2.5% Y/Y increase was the largest 12-month increase since March 2012. Most of the major component indexes increased in January, bringing the CPI excluding food and energy up 0.3%, for a Y/Y increase of 2.3%.

Retail Sales for January also beat expectations at 0.4% M/M (5.6% Y/Y), and December’s M/M sales were revised sharply upward to 1.0% vs a prior 0.6%. Sales excluding autos and gasoline were revised upwards for December from 0.0% to 0.1% and came in at 0.7% for January. Other than automobiles, sales increased in all sectors in January, including department stores which had their largest sales increase in 12 months at 1.2%.